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TMI Blog2013 (7) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue as to whether the particular repair expenses are of revenue nature or of capital nature was highly debatable one and there was no case of furnishing of inaccurate particulars of income by the assessee in treating repair expenses to be of revenue in nature. Penalty deleted.In favour of assessee. Disallowance out of miscellaneous expenses to the extent of 10% for want of supporting voucher - Held that:- Adhoc disallowance of 50% out of miscellaneous expenses was made by the A.O. on estimated basis and the said estimate was revised by the CIT(A) while restricting the disallowance to 10%. It was thus a case of disallowance made on estimated basis for want of supporting voucher and there was no case that any bogus expenses not rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the following extent:- (i) disallowance of repairs and maintenance expenses treating the same as capital in nature ₹ 20,73,464/-. (ii) disallowance of technical and administrative expenses representing adhoc provision made by the assessee without any basis ₹ 42,22,348/-. (iii) disallowance out of miscellaneous expenses to the extent of 10% for want of supporting voucher ₹ 27,89,623/-. (iv) disallowance on account of leave encashment expenses. 3. As a result of the sustenance of the various additions made by the ld. CIT(A) in the quantum proceedings as above, penalty proceedings u/s 271(1)(c) OF THE Act were initiated by the A.O. In reply to the show cause notice issued by the A.O., it was explained by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome by the assessee, penalty u/s 271(1)(c) of the Act was leviable. Accordingly he imposed penalty of ₹ 3907,835/- u/s 271(1)(c) of the Act being 100% of the tax sought to be evaded by the assessee in respect of additions made to the total income of the assessee. 4. The penalty imposed by the A.O. u/s 271(1) of the Act was challenged by the assessee in an appeal filed before the ld. CIT(A) and the submissions made before the A.O. were reiterated on behalf of the assessee before the ld. CIT(A) in support of its stand that there was no case of furnishing of any inaccurate particulars of its income in respect of additions/disallowances made in the quantum proceedings. The ld. CIT(A) found merit in the submission made by the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the exact nature of expenses being a debatable one, penalty u/s 271(1)(c) of the Act cannot be imposed. In support of this contention, he relied on the decision of co-ordinate Bench of this Tribunal in the case of DCIT vs. Shivalik Global Ltd. (2011) 8 ITR 761(Delhi) and DCIT vs. Eagle Iron and Metal Industries reported in (2011) 11 ITR 384(Mum.) (Trib). As regards the addition made by way of disallowance of miscellaneous expenses, he submitted that the relevant record was misplaced during the course of shifting of the office of the assessee and the assessee, therefore, could not produce the relevant details and documents to support and substantiate its claim for miscellaneous expenses. He submitted that the A.O., therefore, disallowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital. The action of the A.O. in allowing the depreciation on the said expenses clearly shows that genuineness of the same was not disputed by him and the fact that the said expenses were related to the business of the assessee was also accepted by him. In the similar facts and circumstances involved in the case of DCIT vs. Shivalik Global Ltd. (supra), Delhi Bench of this Tribunal has cancelled the penalty imposed by the A.O. holding that penalty u/s 271(1)(c) of the Act was not justifiable because the issue as to whether the particular repair expenses are of revenue nature or of capital nature was highly debatable one and there was no case of furnishing of inaccurate particulars of income by the assessee in treating repair expenses to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us expenses not relating to its business were claimed by the assessee under the head miscellaneous expenses. In the similar facts and circumstances involved in the case of DCIT vs. Eagle Iron and Metal Industries Ltd. (supra), the co-ordinate Bench of this Tribunal has held that where disallowance had been made purely on the basis of difference of opinion and on adhoc basis, there was no case made out for concealment of income or furnishing inaccurate particulars of income to justify imposition of penalty u/s 271(1)(c) of the Act. Keeping in view of the said decision of the co-ordinate Bench of this Tribunal and having regard to the facts and circumstances of the case, we are of the view that penalty imposed by the A.O. and confirmed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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